2022 has been nothing short of difficult for auto dealers, as harsh conditions like supply shortages and inflation have heavily impacted sales and inventory. And as Summer comes to a close, the auto industry looks forward to Fall and beyond and the changes that it holds for business owners.
While the first half of the year has been a bit of a challenge for many, things are starting to look up for many, in some respects – here is the auto industry forecast that dealers should take note of, going into Fall 2022.
New Car Sales Are Down, Inflation and Interest Rates Up
The most noteworthy piece of information that auto dealers should acknowledge is the low sales volume during the first half of 2022. Compared to the first half of 2021, 2022’s sales are down more than 19%. Experts are now adjusting their sales forecasts for 2022, lowering the expected US auto sales from 15.3 million vehicles to only 14.4 million.
This may indicate that sales will continue to stagnate, with factors such as the continued low supply and high inflation rates paying a large role. And as many are aware, the federal government recently raised interest rates, in an effort to dissuade consumer spending and combat inflation. This may also partially account for the decreased car sales.
And while on the surface this may look like a very negative thing, it may actually help in the long run as it could allow for the supply chain to catch up while potential buyers save their money instead.
Electric Car Turning Point May be Close
Electric cars had a dramatic increase in sales earlier this year, with a 60 percent increase in an overall market that was down 18 percent – this increase amounted to the EV share of the overall market in the United States to hit 4.6 percent, which is an all-time high.
And while this doesn’t sound all that impressive on paper, especially when compared to certain European countries where the majority of all car sales are EVs, our country is moving slowly to adopt electric cars. This large surge in sales, however, may be indicative of a turning point in the auto industry – particularly when considering the fact that new car sales overall are lower than ever before.
Chip Shortage is Easing, But Only Some of Them
Thanks to reduced consumer spending and stockpiling of chips, it seems that the chip shortage is easing up, but only for some chips. The prices of DRAM chips and graphics processing units (GPUs) both fell by 10.6 percent and 17 percent over the past month or so, respectively, as the overall demand for gaming PCs, which are used to mine crypto-currency, has fallen.
The prices of semiconductor chips have remained high, as the supply very much continues to remain sparse. Experts estimate that the semiconductor shortage will continue on throughout the rest of 2022 into next year, and may not return to normalcy until 2024 – as the supply continues to be low. Thanks to raised interest rates, demand may continue to lower, which may help manufacturers catch up. But overall, the shortage continues with no sign of returning to normalcy anytime soon.
Manufacturers and Dealers Can Still Succeed
While the ongoing semiconductor chip shortage and lower sales seem like they’d spell the doom of the industry for businesses, manufacturers continue to do well – by simply prioritizing the production of more popular models, creating cheaper versions of certain models, and other cost-cutting measures.
Dealerships, on the other hand, can prosper by opening up their business to a wider market – particularly, by thinking digitally. Online car sales have grown immensely in recent years, largely due to the pandemic. More dealers than ever now offer online car sales in order to find customers outside of their local area, which has proven successful. And by offering online car sales, your dealership will need the proper tools to transport said vehicles: and an auto transportation platform is what you’ll need.
Super Dispatch packs in a transportation management system and load board into one single package, that will allow your business to find trustworthy carriers, track shipments in real time, and much more. If you want your business to thrive in this ever-changing industry, then online car sales is what you need – and you can do so with the help of Super Dispatch. Request a demo today!
